bender

This really boils down to how fast can Delta increase the pilot group net of retirements. The most new hires that Delta has trained in a year was roughly 1200 in 2016. Retirements starting in 2021 will be roughly 700 and will remain above 700 for the next 5 years. That means that once Delta starts to recall furloughs they will only be able to increase the pilot size by 400-500 per year. Ed mentioned in the town hall today that he thinks the recovery will take 2-3 years, and the ATL airport manager said in an interview that he believes the recovery will take 3-5 years. If you take the most pessimistic of those two views, and use a 5 year recovery timeframe, we need to be back at a pilot group size of 14700 in the second half of 2025.

I’ve read the break-even point for furloughs is 18-24 months, but let’s assume Delta needs to cut costs in the short term to save their cash position so they are willing to furlough the most senior pilots for only 12 months. Because they can only increase the pilot group by 400-500 per year once they start recalls, I’m assuming they would only furlough in the 4Q of this year and then begin recalls in 4Q 2021. 4 years of recalls/hiring from 4Q 2021 to 4Q2025 at a net gain of ~450 pilots per year means that we can only be 1800 positions fewer in 4Q 2021 once we start recalls in order to be back at 14700 pilots by the end of 2025. Factoring in roughly 1000 retirements over the next year means 800-900 involuntary furloughs on October 1st.

However, 800-900 involuntary furloughs probably wouldn’t happen because of other voluntary measures that we would take such as early out retirements, SILs, KLOA, and the infamous ALV reduction. If you only utilized an ALV reduction instead of the other options then you would only need to drop the ALV by 6-10% in order to save the 800-900 junior pilots’ jobs. That’s an ALV of 65-67 hours for approx. 12 months.

I’m a liberal arts major so I probably f’ed up the numbers and assumptions somewhere, but food for thought anyhow.

SIUav8er

Great post! Finally someone thinking logically on here. I would only add, nobody knows when the public will decide its safe to fly again. Especially the international stuff. Airline execs, economists, and even airport managers are not psychic.

sailingfun

They have in the past sustained 100 pilots a month with a much smaller training department. They can scale up to whatever they feel is needed by contracting for outside sim time. There is no real constraint at 100 pilots.

tropflyer

I wouldn’t assume that Delta will need a pilot group size of 14,700 again once this recovery is complete. Remember, we only had 13,000 total pilots about 3-4 years ago. Some of our hiring was based on future growth and attrition rather than immediate staffing needs.

This industry will likely be 10-20% smaller after the recovery is complete. So 12,000 total pilots will represent a near best case scenario recovery for Delta.

I agree with you about exhausting all possible SIL and early retirement options. I draw the line at offering any voluntary concessions or ALV reductions, however. Short-term ALV reductions and concessions simply can’t alleviate longer-term furloughs. Management will do everything they can to fool you into thinking otherwise over the next 6 months.

charleyvarrick

I fear that Bastian may have your case dismissed by the bankruptcy judge.

Myfingershurt

people will decide it’s safe to fly again the very second mass media tells them it’s safe.

notEnuf

Management will do absolutely everything to match headcount with demand and revenue across all work groups. My guess is they will target a lean operation to have a cost offset for the revenue loss. It will be awhile before we can generate our price premium again, if ever. Revenue will lag for some time with fare sales and cut throat competition to survive and grab market share. It was a long slow process leading the industry to capacity discipline and price appreciation. In fact we were investigated for our role in the market because the feds thought we were signaling on capacity. We will have to climb that same hill. Consolidation would help and the likely failure of the regional model too. It's tough enough to make money on a jet with 50 to 76 seats, then add in the fact that there's no real premium differentiation in the cabin and no middle seats to block.

2StgTurbine

There is a problem in your calculations. Airlines always like to understaff. They assume they can get pilots to be more productive in the future and they also think the training department can handle more events than it actually can. So if they think the economy will be fully recovered in 2025, they will probably end up thinking we need 1,000 pilots less than we actually do.

Herkflyr

Actually pilots easily CAN be more productive (GS, GSWC, rolling thunder) if we wish, and the training department can easily handle whatever surge the company asks of them. 85 hours a month pay at whatever you can hold system wide (that NYC base has made a lot of money for a lot of instructors who wouldn't dream of ever commuting there) plus more events above the norm if needed, allows for a lot of training center "flex" capabilities.

This old urban legend of "the training department just can't handle xxx new hires and yyy retirements a year" has never been proven correct. It's almost some strange "wishful thinking." In 23+ years here, I'm unaware of a single instance where lack of training capacity has ever been a reason to deny network plans. If indeed we are going to be "a smaller airline" then it certainly won't be a problem in the future.

hockeypilot44

In my opinion, anyone hired after December 1st, 2016 is in the furlough zone. I think we drop down to 10,000-12,000 pilots. Probably 1500-2500 pilots will be involuntary furloughed and the rest will happen through retirements. This is just an opinion and you know what they say about opinions. We might never see 15,000 pilots at this airline. I hope your prediction is right, but it seems overly optimistic to me.

I've also read the overly pessimistic predictions too of us furloughing 5000-6000 pilots or 30-40 percent of our list. Fortunately, we won't find out for a couple months. Maybe things will drastically look different for the better.